What is bitcoin?

Cryptocurrency trading is a relatively new way to make money in the market, especially since the prices of most cryptocurrencies have skyrocketed this year. Of course, this type of investment vehicle is risky, as prices are extremely volatile. For this reason, it’s important to create a sensible trading plan before entering the market, and above all, to follow your money management and risk management rules if you don’t want to lose your trading capital.

Using a first-class broker such as UFX.com will allow you to take advantage of all the latest innovations in trading, with advanced and professional tools and charts to help you invest in virtual currencies. Almost all cryptocurrencies brokers worldwide offer financial products on altcoins such as Bitcoin, Ethereum, and Bitcoin Cash, 3 of the world’s most popular digital assets.

Bitcoin is the most widely traded virtual currency, and its price recently surpassed the $8,000 level, a record high. This cryptocurrency was created in 2009 by an individual – some say a group of developers – known as Satoshi Nakamoto. Bitcoin is based on the platform of the same name and uses blockchain technology to power its operations.

As it became more popular, the number of transactions rapidly increased, while the number of transaction per block remained the same at 4.4, since the block size limit is just 1 MB. Bitcoin traders often had to wait for a new block of transactions to be created before their transactions could be approved and processed, increasing fees across the board. Networks run by Visa or Mastercard, meanwhile, can deal with several thousand operations per second, while the Bitcoin system can deal with only about 10.

The Bitcoin community therefore faced a scalability problem and was forced to consider increasing the block size. This led to a fork in the system, with some users preferring the security of the existing model, and others prioritising faster processing times. There are now 2 separate systems with 2 parallel currencies. On August 1st, 2017, Bitcoin experienced what’s called a hard fork, with the birth of Bitcoin Cash (BCH or BCC), boasting a block size of 8 MB.

The prices of Bitcoin Cash and Bitcoin often appear to be negatively correlated, although they can sometimes rise and fall in tandem. It’s currently hard to predict which currency will emerge as the favourite of the Bitcoin community at large, and its hundreds of thousands of newer users.

If Bitcoin Cash and Bitcoin continue competing for the same pool of investors, it’s also possible that they could hinder each other’s price gains.

Stay with UFX to be informed of the latest Cryptocurrency trends.

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